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Grayscale Investments LLC Grayscale Zcash Trust (ZEC) (ZCSH+3.17%) has submitted its annual report on Form 10-K filing for the fiscal year ended December 31, 2024.
The filing outlines the Trust's purpose of holding Zcash (ZEC), a digital asset, and its operations as a Delaware Statutory Trust formed on October 23, 2017. The Trust aims to reflect the value of ZEC held by the Trust, less expenses and liabilities, through the Shares it issues.
The Trust's investment objective is to track the value of ZEC, but the Shares have historically traded at a substantial premium or discount to the Trust's net asset value (NAV) per Share, due to factors such as the holding period under Rule 144 and the absence of a redemption program.
As of December 31, 2024, the Trust held approximately 2.4% of the ZEC in circulation. Each Share represented approximately 0.0835 ZEC, and the Trust's assets consisted solely of ZEC, Incidental Rights, IR Virtual Currency, and proceeds from the sale of ZEC.
The Trust's operations include issuing Baskets in exchange for ZEC, transferring or selling ZEC to cover expenses, and distributing cash or Incidental Rights to shareholders. The Trust does not engage in activities designed to profit from changes in ZEC prices.
The filing discusses various risks related to digital assets, such as extreme volatility, regulatory changes, and potential forks or clones of the Zcash Network, which could adversely affect the value of the Shares.
Grayscale Investments LLC, the Sponsor, is responsible for the Trust's day-to-day administration, including calculating the NAV and selecting service providers. The Sponsor's Fee is 2.5% of the Trust's NAV and is paid in ZEC.
The Trust relies on third-party service providers, such as the Custodian and the Transfer Agent, for essential functions. Any disruptions to these services could impact the Trust's operations and the safekeeping of its ZEC.
The Trust is not registered under the Investment Company Act and is not subject to the same regulatory protections as registered investment companies. The Trust also does not hold or trade in commodity interests regulated by the CFTC.
The filing highlights the Trust's reliance on the Index Price, calculated using data from selected Digital Asset Trading Platforms, to determine the NAV and NAV per Share. Changes or errors in the Index Price could affect the value of the Shares.
The Trust may be subject to extraordinary expenses, such as taxes or legal fees, which could be paid by selling ZEC and could negatively impact the value of the Shares.
The filing also addresses potential conflicts of interest among the Sponsor, its affiliates, and the Trust, as well as the limited rights of shareholders under the Trust Agreement.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Grayscale Investments LLC Grayscale Zcash Trust (ZEC) annual 10-K report dated March 7, 2025. To report an error, please email earnings@qz.com.